Swedish people have a problem: bugdet surplus due to overpaid taxes

Sweden’s government has an unusual complaint, it is collecting too much tax. With interest rates in the country at -0.5%, holding cash in bank accounts and other savings vessels provides little to no return and in many cases actually costs people money.

According to data released by the government on Wednesday, Sweden ended 2016 with a budget surplus of 85 billion kroner ($9.5 billion), and about half of that was due to individuals and businesses paying more tax than they needed to as a means of actually making money.

"The development of Sweden's central government finances is still affected by excess deposits in tax accounts," a report from the Swedish National Debt Office said.

“We cannot do anything, it is simply a consequence of current interest rates,” Marten Bjellerup, the national debt office’s head of forecasting, told the Financial Times on Wednesday. The government said that this “involuntary borrowing” from taxpayers would cost it about SKr800 million more this year and last than if it had borrowed the money at market rates.

For the past two years, since March 2015, Sweden’s central bank has kept rates below 0%, as have other Swedish banks, in a broad effort to have the economy avoid deflation. At the same time, the government promised to pay a positive interest rate (0.56%) for any funds that had been overpaid in tax, upon their return to the taxpayer. Even though this interest payment has since been cut to zero, individuals and companies remain better off storing their savings in the form of overpaid tax, rather watch them shrink in the bank.